Rose and William Morgan (Morgans) (defendants) purchased a car from a dealer on June 27, 1978. The dealer assured the Morgans that the car was reliable. The Morgans financed their purchase through Ford Motor Credit Company (Ford Motor) (plaintiff). The Morgans were to pay Ford Motor in monthly installments. During the fall of 1979, the Morgans began experiencing problems with the car and stopped paying the monthly installments. Ford Credit eventually repossessed the vehicle and sued for the money owed on the contract. The Morgans argued that they were not responsible for any further payments because of the dealer’s fraud and misrepresentation. The Morgans further argued for a return of the amount already paid to Ford Credit. The trial court held that the Morgans were not liable for any future payments, but denied the affirmative recovery for return of money already paid to Ford Credit. The Morgans appealed.